Unisys hit by declines in services, technology sales

Company's technology and services business arms also suffered from sales drop

Unisys Corp. continued to tighten its operations to deflect a 13 percent third-quarter decline in revenue from lower technology and project-based services sales, the company said today.

The quarter's revenue declined from $1.11 billion in the third quarter of 2009 to $961 million during the same period in 2010. The company attributed two of those percentage points to divested businesses.

Overall, Unisys had $28.3 million in net income in the third quarter, compared to $61.1 million net income in the same period in 2009. It also earned $21.8 million in overall income from continuing operations, compared to $52.4 million in 2009, according to its quarterly financial report.

“We made further progress on many fronts in the quarter as we continue to reshape the Unisys business model,” said Ed Coleman, Unisys chairman and CEO.

The company's various business arms also suffered from lower sales.

Unisys’ services segment declined 10 percent compared to last year. Revenue fell from $952.8 million in the third quarter of 2009 to $855.2 million in 2010. Services orders showed double-digit declines from last year, which included a significant business process outsourcing contract renewal, the company said.

The technology segment’s revenue fell 31 percent from the third quarter of 2009. Revenue declined from $153.6 million in 2009 to $105.4 million this year, driven by lower sales of Unisys’ ClearPath servers.

“After three straight quarters of strong growth, sales of our ClearPath servers declined, impacting our net income comparisons against a strong third quarter a year ago,” Coleman said.

Unisys recently introduced new models of ClearPath servers and new secure partitioning virtualization technology. The new models allow users to improve the efficiency of their data center environments.

Coleman said Unisys is offering more technology and solutions, such as the new ClearPath servers, to push for profitable growth.

“Our more competitive portfolio positions us to capitalize on emerging growth markets in our areas of strength,” he said.

Unisys, of Blue Bell, Pa., ranks No. 38 on Washington Technology's 2010 Top 100 list of the largest federal government contractors.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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